Vino Khosla, co-founder of Sun Microsystems and one of Silicon Valley’s most active cleantech investors through his firm Khosla Ventures, doesn’t always sound like a VC who has invested hefty sums in lithium-ion battery startups, including Sakti3 and Seeo. “Lithium-ion batteries are overhyped and will possibly be replaced,” he said today at the AlwaysOn Summit at Stanford. He told me after his talk, however, that Khosla Ventures is backing the technology because the “lithium-ion markets are here today. We’re investing because there are good markets.” Problem is, costs have to down — or oil prices have to shoot up — for most battery ventures to make big winners of entrepreneurs and their investors, Khosla said. When asked during his talk this morning with Fenwick & West Chairman Gordon Davidson what it will take to get low-carbon cars on the road in significant numbers (which would boost demand for technology from companies like Sakti3), Khosla said, “The most important thing to remember is economic gravity — the cheapest thing ends up winning.” For that reason, he said, “I can’t imagine lithium ion making low-carbon cars pervasive anytime soon.” Then again, if oil prices jump to $100-150 per barrel, “you’ve got a different ballgame.” It’s largely the cost issue that Khosla says makes hybrid vehicles “greenwash.” He drives a hybrid, and considers the Toyota Prius “interesting,” but says it offers a very expensive, and thus limited solution for reducing greenhouse gas emissions. “Just get a bucket of white paint, paint your roof, and you’ll save more carbon,” he said, than you would driving a Prius. Never mind all-electric cars, he said, which in the U.S., China and India will be “plugging into a lump of coal” for years to come. Khosla sees government subsidies in the U.S. and Europe as a key to bringing many clean technologies to the global market at competitive cost. “Every investment we make should reach unsubsidized market competitiveness,” he said, usually in the timeline of 5-7 years. This is important, he said, because fast-growing markets in China, India and elsewhere in the world don’t have subsidies. So the idea is to “use the U.S. and European regulations to get down the cost curve until such time that you can compete” without government assistance. At this point, Khosla sees some parallels between the relatively early stage of cleantech innovation, and expectations for the Internet in the early 1990s — we have no idea what “one breakthrough will change the rules on what renewable energy is.” Back in 1990, he said, “everybody assumed the digital world would be interactive TV…the Internet came from left field, from an unlikely instigator: the browser.” Right now, it’s too early to tell what the instigator will be for energy. “There are radical approaches that might come along, a different kind of battery, for example…or a different kind of sequestration, that we aren’t planning on.” On the road to those radical breakthroughs, we can expect to see some massive failures in the cleantech sector. “What is amazing about this is the size of the markets. We are dealing with much harder science and technology, so we will see much higher rate of failure,” Khosla said, “but the wins will be bigger. More money will be made in cleantech than in traditional areas of Silicon Valley — by far.”
With billions of dollars in government funds coming down the pipeline for advanced batteries courtesy of the stimulus package, and the auto industry gearing up to make its first real go at marketing plug-in vehicles for the masses, the race to build lithium-ion batteries for vehicles has never been hotter. Massive international battery makers may dominate the mobile device and laptop markets for lithium-ion batteries, but a growing number of companies — some founded just in the last year, others that have been around for over a decade — are hoping to carve out a piece of the battery vehicle market. They have their work cut out for them, however, as more established companies such as Sanyo, Hitachi and NEC are eying the same prize. As the money rolls out and competition heats up, here are 13 battery startups you should know about:
A123Systems: Massachusetts-based A123Systems, working with nanoscale materials licensed from MIT, has attracted big-name backers including General Electric, Motorola and Qualcomm. The startup had raised $132 million by late 2007, and last year filed for an IPO. But A123 has since revised its registration with the SEC several times (taking into account tumult on Wall Street and in the auto industry, and most recently the introduction of new government incentives) and has yet to go public. Runner-up to supply cells for General Motors’ Chevy Volt and winner of a deal with Chrysler to make modules and battery packs for the struggling automaker’s planned plug-in vehicles, A123 is also working on energy storage systems for electric utilities and got its start with batteries for power tools. The company has its eye on at least two DOE programs, and has won state-level support as part of Michigan’s efforts to lure battery manufacturing jobs.
Boston-Power: Massachusetts-based laptop battery maker Boston-Power unveiled a new battery for plug-in vehicles in May 2009. The 4-year-old company hasn’t released many details about this “Swing” model, other than to say that it will deliver “industry-leading capabilities” in areas such as energy density, lifespan, safety, cost savings and environmental sustainability. While Boston-Power says it has enough manufacturing capacity to produce millions of cells per month in Asia, it aims to build a new lithium-ion battery factory within three years in Auburn, Mass., for both laptop and vehicle battery cells — if it wins approval from the DOE for about $100 million in grants. Otherwise Boston-Power plans to continue to grow and open more factories to meet demand, but probably not stateside.
CFX Battery: Co-founded less than a year ago by Rachid Yazami, research director of France’s National Center for Scientific Research, Caltech professor Robert H. Grubbs and French chemist Andrew Hamwi, CFX Battery is working with technology developed at Caltech to produce prismatic (flat), cylindrical, thin-film and coin lithium-ion cells. The Azusa, Calif.-based startup has reportedly raised $15 million and now says it is growing its team and seeking alliances with major equipment manufacturers as it develops batteries for not only electric cars but also medical devices, mobile phones, laptops, and military and industrial applications. Anticipating a lithium squeeze down the road and eying lower-cost alternatives, Yazami tells the New York Times that he is also “trying to develop a battery powered by nano particles of sodium and water.”
Electrovaya: Mississauga, Ontario-based Electrovaya makes battery systems (cells, modules and interfaces) for hybrid and electric vehicles — including some of its own, such as the low-speed electric Maya 300 that rolled last month in a small ExxonMobil-backed car-sharing program. Working with nanostructured lithium-ion polymer technology, Electrovaya snagged three deals with Chinese manufacturers late last year, and also has agreements with India’s Tata Motors and Norway’s Miljø Innovasjon for highway-speed electric cars. The company was founded in 1996 and began trading on the Toronto Stock Exchange four years later.
Enax: Founded 13 years ago as a battery consulting service in Tokyo, Enax is now working on “lithium-ion cells especially for future hybrid and electric drives in automobiles” with battery giant Continental, whichbought a 16 percent stake in the company last year. Enax claims the new batteries will be safer and have a longer service life than today’s offerings, as AutoblogGreen reports. The company, which aims to provide batteries for “electric vehicles, submarines, fuel cell system, etc.,” also supplies electrodes to other companies.
Envia Systems: Based in Hayward, Calif., early-stage Envia Systemsraised a $3.2 million first round of financing late last year from Bay Partners and Redpoint Ventures to help with development of “high performance, low cost energy storage solutions using lithium ion batteries” for plug-in vehicles.
Imara: Founded in 2006, Menlo Park, Calif.-based Imara is working on small-format batteries for power tools and outdoor equipment, with the goal of eventually producing vehicle batteries after it builds “a solid economic base,” VP Neil Maguire tells Triple Pundit. Still, the company has requested stimulus funds from the DOE to build a plant in Portland, Ore., to produce cells for plug-in hybrid vehicle batteries. Imara has raised $20 million in venture capital (investors include Battery Ventures and Nth Power) and licenses its technology from SRI International. The company told us late last year that it aimed to use the funds to ramp up annual production capacity to at least 8 million cells by the end of 2009, with electrode manufacturing facilities in Menlo Park, Calif., and assembly for small-format batteries contracted out in Asia.
Mobius Power: Based in Fremont, Calif., Mobius Power aims to produce lithium-ion batteries with high energy density for mobile phones, notebook computers, backup power for the grid, and hybrid vehicles. Founded in 2007 with a reported $4.5 million investment from Walden International, Lightspeed Venture Partners and Sigma Partners, the company is not revealing many details, but says its “technology is based on innovative and patented developments in the research laboratories at a major U.S. corporation.”
Sakti3: Sakti3 has been amassing funds and partnerships since we first wrote about its $2 million investment from Khosla Ventures last year. It remains tight-lipped about its technology, however, which stems from research led by CEO Ann Marie Sastry, who heads up University of Michigan’s energy systems engineering program. Sakti3 has won significant support from the state of Michigan and partnered with General Motors, a move designed to strengthen both companies’ requests for government aid and a vote of confidence in the startup’s cell tech. In a separate deal, Sastry is already helping to retrain 50 GM engineers at the University of Michigan. To reach commercial-scale manufacturing within three years, Sakti3 hopes to get a $15 million grant from the Department of Energy.
Seeo: Seeo has developed a nano-structured solid-state battery based on a solid polymer electrolyte that founder and technology director Mohit Singh says is more stable, safer, and has a higher energy density than lithium-ion batteries now on the market. For comparison, MIT’s Technology Review explains, “[T]oday’s lithium-ion batteries use lithium cobalt oxide electrodes and a liquid electrolyte…the electrode material can release oxygen when overcharged or punctured, causing the flammable solvent to catch fire and the battery to explode.” Singh developed the nanostructured polymer electrolyte as a post-doctoral fellow at Lawrence Berkeley National Labs, and says the batteries can deliver 300 watt-hours per kilogram (compared with less than 200 watt-hours per kilogram for a traditional lithium-ion battery) and can operate at a much higher temperature than the competition. The company has reportedly raised around $2 million in funding from investors including Khosla Ventures.
Planar Energy Devices: Founded in 2007 as a spin-out from the National Renewable Energy Laboratory, Planar is working on solid-state, high-capacity batteries. If $56 million in DOE funds come through, the startup plans to start production at a shuttered lithium-ion battery factory built over a decade ago in Gainesville, Fl. When we wrote about Planar last fall it had one technology that it wanted to use for micro, mid-sized and large batteries — starting with military applications and smart cards. The company’s thin-film batteries, designed with a “laminated safety separator” that Planar says protects cells from thermal and overcharge abuse, are supposed to charge in seconds, have a high energy density, last 400-500 life cycles and be safer than traditional lithium-ion batteries. These days Planar’s focus seems to have shifted more to vehicle batteries, at least for the purpose of securing stimulus funds.
Quallion: Although Quallion has been around since 1998, making lithium-ion cells and batteries at high volume for medical and military applications, and in custom designs for aerospace and other applications, the company is a relative newcomer to the plug-in vehicle battery market. It has requested $220 million in stimulus funds from the DOE to build a factory in Palmdale, Calif., with capacity to produce 20,000 lithium-ion batteries a year for hybrid cars and trucks by 2012,according to the Los Angeles Times. Co-founded by billionaire Alfred Mann, Quallion has won support for its aid request from a delegation of 17 California representatives in Congress, and the state Energy Commission, which has pledged to provide up to $9 million if the DOE gives the green light. AsAutomotive World reports, Quallion aims to produce lithium-ion batteries for cars as well as “batteries that replace engine idling as a stationary power source for heavy duty trucks” at the proposed Palmdale facility
Amprius is a leading Lithium-Ion battery developer Amprius's silicon technology was originally developed at Stanford University and enables dramatic improvements in the energy density and specific energy of Lithium-Ion batteries. Amprius is backed by some of the world’s leading investors, including Trident Capital, VantagePoint Venture Partners, IPV Capital, Kleiner Perkins Caufield & Byers, and Dr. Eric Schmidt.
$25M for breakthrough batteries from Kleiner, Google CEO